New Regulations Enforce Beneficial Ownership Transparency
The Companies Act No. 5 of 2020 has introduced significant changes to the definition and disclosure of beneficial ownership information.
Definition of Beneficial Owner
According to Section 2 of the Companies Act, a beneficial owner is defined as any natural person who ultimately owns or controls a company, either directly or indirectly. This includes individuals who own or control at least 20% shares of a company, have voting rights, ownership interests, or exercise control through other means.
Filing Obligations
Companies are now required to file beneficial ownership information with the Registrar within 14 days of any changes to their share register. The register must be kept for a minimum of 7 years from the date of completion of the transaction or activity related to it.
Obligations by Companies
- Keep a register of shareholders or members, including beneficial ownership information.
- Identify natural persons who hold controlling ownership interests and senior managing officials.
Sanctions for Non-Compliance
Failure to comply with these new regulations can result in severe penalties, including fines of up to 300,000 rupees for companies other than small private companies.
Other Legislation and Measures
- The Financial Intelligence and Anti-Money Laundering Act (FIAMLA) requires companies and designated non-financial business professions to cooperate with competent authorities by sharing information.
- Retention of records for at least 7 years is a requirement under various legislation and measures aimed at enhancing transparency in the corporate sector.
Obtaining Beneficial Ownership Information
Beneficial ownership information can be obtained from:
- Registries
- Financial institutions
- Designated non-financial business professions (DNFBPs)
- Other competent authorities such as supervisors, tax authorities, and stock exchanges
Legislative Reforms
The requirements for beneficial ownership information also apply to limited partnerships, limited liability partnerships, foundations, and business registration acts. These amendments aim to increase transparency in the corporate sector and combat money laundering and terrorist financing.
For more information on these regulations and how they affect your company, visit companies.govmu.org.